Lottery Regulations in the United States


The casting of lots to determine ownership or other rights has a long record in human history (including some instances in the Bible), and public lotteries became common in Europe in the fifteenth century, raising money for towns, wars, universities, and other projects. In the United States, Benjamin Franklin held a lottery in 1776 to raise money for cannons for Philadelphia’s defense against the British, and Thomas Jefferson tried to hold one in Virginia to help pay his debts.

In modern times, the state legislature legislates a monopoly for the lottery; it sets minimum prices for tickets; and it regulates advertising, ticket sales, and promotion. In addition, most states impose a minimum age of participation (18 in some jurisdictions). State lotteries also often require that players sign a statement that they understand the risks of playing.

State governments earmark some of the lottery proceeds for specific purposes, such as public education. But critics charge that earmarking simply allows the legislature to reduce by the same amount the appropriations it would have had to make for these programs from the general fund.

State governments rely on lottery profits to offset declining revenues from other sources, such as income taxes and sales tax. A number of states are increasing their efforts to promote games such as keno and video poker, hoping that these can bring in more money. In addition, some states are attempting to expand their marketing to lower-income populations. The growing reliance on these revenues has created a variety of new problems, including concerns about compulsive gambling and the regressive impact of the lottery on lower-income people.